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Holiday Blues – Paying with a credit card

Authored by Phil Meekin

Phil Meekin

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Approximate read time: 2 minutes

Just booked a holiday to cast away those January blues? Make sure you pay on your credit card!

Consumers need to be savvy when paying for a holiday and protect themselves in case the holiday providers become subject to insolvency proceedings.

Have you ever been in the unfortunate position where you have booked a holiday only to be informed the travel company or hotel you’ve booked with has become subject to Insolvency proceedings? Anyone who has will know the disappointment of discovering you won’t be able to go on the holiday you’d eagerly waited for.

What can make the disappointment all the more upsetting is the discovery you are out of pocket. As the insolvent company is not in a position to refund the deposit you have paid!

Customers who had placed deposits for a stay at the George Hotel in Huddersfield, which has recently gone into receivership and closed its doors on 2 January 2013, as the management company who managed the hotel, LICENSED Ventures Number Two went into liquidation, may have just discovered this double whammy of disappointment., It seems in the current financial climate that this will not be a rarity with more hotels potentially suffering a similar fate in the year ahead.

There is a way for consumers to protect themselves however form this disappointment – pay on your credit card and under section 75 of the Consumer Credit Act 1974 the credit card company may be equally liable and as such equally responsible for providing you with a refund. There are of course, as with anything, conditions to this. The Office of Fair Trading website advises that;

“Section 75 provides that the credit provider will be ‘jointly and severally liable’ with the supplier if:

  • the cash price of the item is more than £100 but not more than £30,000
  • the credit agreement is regulated under the Act, and
  • credit is advanced under arrangements between the credit provider and the supplier.’

So make sure you are not unnecessary casualty of a company’s insolvency and protect yourself by using a credit card!

Author: Deborah Wing

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